DOF Group ASA (DOFG) Earnings Call Transcript & Summary

Good morning and good afternoon, and welcome to the Q4 presentation for the DOF Group. We will go through the presentation, and then we will have a Q&A at the end. So I guess, the question will be sent through the -- what is it called? The link, or what you call it, also in writing. So we will answer all the questions we can, and please, I encourage you to ask questions. So then, we go to the next page, Page 2 here. And so, this is a snapshot of DOF. So today, after the DOF Denmark transaction, we operate a fleet of 77 boats. So we are of -- we own 65. We have charter in 4 and management on 8. And through the year, that might change a bit. We will have a new charter boat coming in April time, and we are reviewing then what our optimal fleet should look like going forward. So it might be that [ we really ] sell a few boats to optimize it. I'll talk a bit more about that later on. The backlog now is good, so $3.25 billion, which is high. And my personal view is, I think, that will grow a lot in the 3 to 6 months. The tender activity is high, and not only big tenders for long term, but also pretty high activity, and what we call the project market and the pipeline also, and that looks strong. So there, you see also on the graphs here that revenue is up, '24 compared to '23. And also, the underlying EBITDA is up quite a lot. So it's been a good year all in all for us. Next page is showing what we are. So, of course, we are a vessel owner, but we also are a subsea services provider. So perhaps what I'm most happy with on this page is that -- we see the graph in the middle here that the earnings in the subsea regions is up a lot, so EBITDA from that growing from USD 88 million to USD 134 million. And I guess, this was also part of the motivation why we bought DOF Denmark. You can not only increase the vessel ownership and earnings from the vessel, but also then we expect to be able to increase the earnings from the subsea services side quite a bit. And that's the phase we are in now. We are transforming the DOF Denmark fleet into the DOF commercial model and look forward to that, talk a bit more about that later on. And of course, also for those who want to do the math, there is a market value from independent brokers of $4.2 billion on the fleet. And then, of course, you could also argue that there is quite a decent value on the -- of our regions that are able to deliver $134 million in a year in EBITDA. Then the highlights for -- on next page for quarter 4. We had a guiding of -- the last window we had on the guiding was $510 million to $520 million, and we deliver now -- excluding DOF Denmark and excluding asset sales, we delivered $519 million, so in the upper end. So we are happy with that. Very strong contribution, as we said on the last page, $134 million from the regions. And fleet utilization, 85%. So it could have been higher, but quite okay. Backlog, $3.25 billion. We have a separate backlog slide to talk a bit more about that later on. And as I said, we expect very strong order intake in the next 3 to 6 months. The Denmark transaction completed. Of course, we got that fleet -- that company 1st November. And of course, we didn't have any -- due to competition at all, we didn't have any insight in what happened until 1st November on the commercial side. So we have had, let's say, a shorter time than we normally have had to build a backlog for that fleet. But the team are working on it globally, and I see -- I'm getting more optimistic on that we will be able to end up with a very satisfying result on employing that fleet going forward. Regarding $720 million to $800 million, we will also come back to that later on. Debt level, down quite a bit. And Martin, our CFO, will talk more about what happened on the cash flow and debt repayments in quarter 4. It was a very strong cash flow in that quarter for us. Perhaps most importantly is that the refinancing is on schedule. All major banks already committed and expect to close it and sign a loan agreement within end of quarter 1, meaning that we plan and are confident that we will pay our first quarterly dividend of $0.3 per share in second quarter. So we look forward to that. And the Board also wants to propose to the general meeting in May to implement the share buyback program. So Martin will talk more about the numbers, and so I leave the numbers for him. So then, we move to this page. So this is just highlights order intake, $2 billion in '24, which is 1.4x, so book-to-bill of 1.4x. So it's a pretty strong year. 88% overall fleet utilization in the year, which is decent. And then, the very strong contribution from the regions. DOF Denmark closed. And then, we won new contract or extended 4 out of the 7 pipe layers we operate, which, of course, give very good foundation and strong earning momentum in the backlog. And then, Buzios back on hire in August. And then, quarter 4, of course, was the third quarter for [indiscernible] in 2024. And perhaps the most important, of course, no major incidents during the year, which is, I guess, always the priority #1 for us. So then, Page 7, please -- no, Page 6, sorry. So this is -- this slide is really what we do. So I encourage you to -- there's 2 videos here, one from the Western Isles decommissioning project and one from Baleine FPSO and FSO installation. So I encourage you to have a look at that to actually see what we are doing. And of course, this is the type of work we do to make the money and make the [ money the ] regions contributed. And in '24, as I said, we have strong -- all regions performed very well. And of course, it's important to understand that, of course, we make these projects not only on the subsea construction boats, but also on the anchor handling boats. So for instance, on the Baleine FPSO project, we had in total 5 DOF-operated anchor handlers on that project, so covering more than 100 days on each boat, and then, of course, also made a decent margin in the region -- in the Atlantic region. And of course, that is important to understand when you see the fleet composition that we have increased our anchor handling fleet. And of course, the plan here is to, let's say, have an anchor handling fleet and own that fleet with what I call a brain. So we don't want to have anchor handlers solely trading in the spot market, but we want to have a handful of anchor handlers that flex between spot and our project activity. And that means, when we talk about fleet optimization, that we might reduce -- we might sell a few boats, but it also means that we also will -- we probably do a few long-term contracts. So there's ambition here is to reduce that fleet between spot and projects to 4, 5 vessels. And today, we have [ 7, 8 ]. So that's the job we have to do on the anchor handling side. On the next page is a picture of Skandi Involver, where we have recently finalized installation of our own subsea equipment, so 2 ROV survey equipment, and the vessel after that went on a long-term contract in Brazil. And we will talk a bit about CapEx later on. And it's important to understand for us, it is very important to get the DOF Denmark fleet into the DOF commercial model. Only 1 decent project on a CSV here can repay the whole CapEx we now spend on that boat. So we -- as I said previously, we do this because we get earnings on the vessel, but we also get very good margins on the projects. And that's the whole -- and of course, that's why we believe that the DOF Denmark fleet can make more money in the DOF model than it could in the old DOF Denmark model. So we are investing in that now, and we'll do that continuously until we have done what we plan to do. So then, we move to the next, please. And this is the backlog, and so $3.25 billion in backlog execution. And if you look at it, $1.366 billion for '25, which is 74% of the midpoint in our guidance on revenue. So it's a very good foundation for '25. And then, as I said, we expect to grow that backlog a lot. And last year, I said I would not go on summer holiday if we were not able to build a very strong backlog. And I'm willing to repeat that this year that I will not go on summer holiday before the backlog is above $4 billion. So I'm confident that we will continue to build backlog, and in first half, we will build a lot. Then the next page is a bit more about building backlog. And this is then a slide showing a few comments on the anchor handling tender and RSV tender process in Brazil. On the anchor handling tender, there were 8 lots. And if we focus now on 6 of the lots, which is the high end of it, 230 tonnes, 250 tonnes and 270 tonnes with or without ROV, there were 8 vessels bid, [ thereof ] 6 from us. So, of course, we -- and you see the pictures here. You have a picture here of the red Norskan fleet on top here. So -- and then, you see the 2 gray, which is 2 Skandi [ I-classes ]. So if we are a bit lucky and clever, of course, we can end up with 6, 7 boats on that tender here. And of course, that tender is done 4 to -- 4 years from early '26 and meaning you have backlog into the 2030. So, that could also solve a part of the challenge we have with too many boats now in the spot market. On the RSV tender, we also bid a handful of boats and, of course, have ambitions that we should be able to place 3, 4, 5 boats on that as well. So I'd say, in an optimistic [ movement ], you could hope for 10-plus boats on these 2 tenders with backlog then into the 2030s at decent rates. But it's still subject to -- the negotiation is still subject to the final award, and there's still a lot of subjects. But of course, I'm -- and we are optimistic that we will get something out of it. So then, we move on. And as I said, the big focus now is to integrate DOF Denmark to get equipment on board, to get our combined commercial team to do their job and integrate it. And we are, let's say, halfway on doing that, and we continue to focus on that. And then, we think it will be a very good addition to not only our long-term charters, but also a very good addition to all our project activity around the globe. So then, we move on. Page 11, please. Then, Martin, I'll leave it to you.

Yes. Thank you, Mons, and hi, everyone. First, to start off, this background photo on the first page is not a coincidence. It's the first debt-free vessel in the group for a while after a very strong performance in Brazil. Following the -- after the restructuring, we have actually repaid the whole loan on the cash sweeps from the performance in DOF Subsea Brasil. So, that is a highlight of the quarter. And on the next slide, we see more on the numbers. And yes, you saw the very highlights on the first page, but it's clearly a continuous positive development. We have continued through the year to deliver very well in most segments and silos in the group. You see, of course, the biggest contributor remains the DOF Subsea and the subsea part with DOFCON now also contributing at a high level after Buzios' full quarter back on hire. DOF Rederi is somewhat lower than previous quarter due to 1 vessel in between contracts and that class docking and also a vessel with a breakdown for part of the quarter affecting the utilization. But all in all, more and more vessels are moving into better paid contracts. So the development remains positive. There is -- of course, that is on EBITDA level, very good, also for the full year, remains very solid. A big negative number also this quarter on the P&L is the loss on currencies. We'll get back to that. It is related to Norskan and the big debt in U.S. dollar in a BRL-denominated company, and we'll do some more explanation on that, but it is driven by, call it -- yes, it's a noncash effect affecting the P&L. And new this quarter is, of course, DOF Denmark included from 1st of November. So this is the 2 months' contribution. It is highly affected by this new -- one-offs and transits and somewhat weak spot market with the fleet operating in the spot market. We'll have a bit more details on that on the next slide, where we also cover the cash flow from the acquisition. The cash consideration on the closing was $557 million. But in the company that we purchased, there was a cash balance of $172 million. So the net outflow of cash in the quarter related to the acquisition is $385 million negative. DOF Denmark contributes in this mentioned 2 months with $46 million worth of revenue and $7 million in EBITDA. It is -- yes, transit, it is spot market. And yes, we had 6 anchor handlers and 1 CSV operating in the spot market. And there was also a one-off cost related to the termination on the Skandi Implementer, where we -- of course, we will work to recover the funds, but it is a $5.5 million loss taken on Skandi Implementer for the quarter related to the nonpayment of [ charter ]. And on the next slide, of course, at the far right-hand side, we see that there is a very strong year-end cash position. The cash development in the quarter is positive, although the debt repayments are extraordinarily high. We'll get back to that as well. So moving from left to right, we started at a cash balance of $450 million. The operations have, call it, after accounting for the full EBITDA, we have -- this quarter, we have a release of working capital of $44 million, so a substantial stronger cash flow than, call it, the earnings. There is some small effects on amortization of contract cost taxes and also the paid interest cost, but resulting in a net cash flow from operating activities of $176 million. So still after interest cost, it is higher than the EBITDA on the quarter. Then we have the investing activities, of course, very highly affected by DOF Denmark again for this quarter with just repeating the content from the last page, but also including the group's general CapEx of $36 million. On the financing side, we have a new -- this is the net payment from the USD 500 million loan related to the closing on DOF Denmark. And we have paid -- repaid or paid down $122 million. So quite a substantial part of the new debt is also repaid during the quarter. And yes, then there is -- of course, with the big fluctuations in currency, there is also a small currency effect on the cash position of the group. And on the next slide, we have a bit more details on the development in debt and net debt. And of course, interesting to see that with the repayments that we have done over the year, even though we have taken a new loan of $500 million, we are only back to the net debt where we were at the end of quarter 1, roughly. And when we exclude both the debt and the earnings from DOF Denmark, we are at a 2.1x multiple on net interest-bearing debt to EBITDA. And of course, it doesn't make sense to include the debt when there is no corresponding EBITDA. So, that is why we have excluded DOF Denmark on the multiple, but only on the multiple. We see there is close to $2 billion total interest-bearing debt on the group. And then back to what we also had at a high level on the slide before. The change in debt over the quarter is normal amortization of $41 million. And then, there is a big -- of course, there was this Skandi Salvador sweep payment that resulted in the vessel being fully repaid. There is a large dividend from DOFCON to its owners of $50 million per owner, resulting in $48 million repayment across the debt in DOF Subsea and also general cash sweeps across the silos, giving us, call it, extraordinary repayment on debt of $81 million for the quarter. The DOF Denmark facility, again, $491 million net paid out. And then there is 1 extraordinary effect on the changes in lease liabilities of $25 million due to the Skandi Installer previously being a lease liability and now is an owned vessel. So, that is a noncash effect on the debt. Yes, and then we go back to this -- yes, on the next one. If we go back to this BRL-USD development, there was -- this is a similar effect to what we saw in the second quarter of 2024. One would think that having USD debt in a company with USD accounts would not make a big effect, but that is only on the balance. There is no balance effect from this debt, but there is the P&L effect. The negative currency effect of the Norskan accounts due to it being functional currency BRL is consolidated into the group numbers, but it is reversed over this other comprehensive income. So the balance effect of this debt is 0. There is no cash impact either now or at a later point in time, but there is a P&L effect, just imported P&L effect from the Brazilian entity. And if we move on to the next one, this is an overview of, call it, previously communicated amounts and what we -- our, call it, ambitions on the refinancing is. It is to simplify the structure. It is to allow for more efficient cash management, reduce restrictions on dividends and restricted cash, and so on. The progress on the refinancing has been very good. It is -- has been very good interest, and it's progressing well. We have, as we stated on the first page, received the commitment from the majority of the banks. And we are, yes, as Mons said, very confident that we will conclude this within this quarter. Back to you, Mons.

Thank you, Martin. So now, we are on the financial guiding and do the numbers first and then the comments after. So we expect revenue between $1.8 billion and $1.9 billion. And we expect between $720 million and $800 million in EBITDA, and talk a bit more about that part of it -- and yes -- and as you see, we have -- it's a higher range than we normally have when we guide. And of course, the reason -- main reason for that is that we are in the middle of transferring the DOF Denmark fleet into the DOF commercial model. And of course, the backlog, when we took it over on 1st November, was a bit lower than we normally have in DOF. But we see enough opportunities on the high-class vessels that there is a reason to be a bit optimistic. And then, of course, the boats in the spot market are -- has been weak so far, but we also have a plan for those. And as we said, we hope to put a few of them on long-term contracts. So it is a bit higher uncertainty than we normally have, but I do think that, that will gradually be reduced. And hopefully, when we come to next round when we present quarter 1, we can narrow that range a bit. But longer term, of course, we are confident that this will be very good when we have done the -- get it into our platform and had a bit of time to do the backlog [indiscernible]. So then, going back to depreciation, $250 million to $260 million; and then net interest cost, $100 million to $110 million; and tax payable, $50 million to $60 million. Then a few words on the CapEx. So it's -- overall, we are talking $270 million to $290 million. And what you can call maintenance CapEx, let's say, the normal running CapEx is $130 million to $140 million. So comparing that, of course to '24, it's a natural increase due to adding 22 vessels. Then we have what we call growth CapEx, which is subject with mainly ROVs. And of course, we do that, so we are installing ROVs on a few of the DOF Denmark boats. And of course, we do that because we think that is a very good investment. And of course, we are bidding projects now on those boats that you should have payback only from the project margin on that CapEx in 1 project for a vessel. So that's why we are doing it, and we think that will pay off quite good. But of course, that is not a repeating -- something we're going to repeat every year. So it is especially high in '25 due to that we did this acquisition. And then we have this newbuild, which is $90 million this year. And of course, that will not be repeated either. So -- but then worth mentioning when we guide here on CapEx, especially on the growth CapEx on the newbuild, of course, this is not cash. So, that will be -- most of it will be financed. And I think we, on the -- for instance, on the ROVs, we normally lease finance, done with 70% to 80% leverage. So the cash portion of it will be limited. Other comment is, as we said, we have 74% of the revenue already secured, and of course, which is pretty high this time of year, and we expect high or what you could call very high order intake within the next 2, 3, 4, 5, 6 months. And then also, we are looking at the fleet. So we have -- so that will be -- we are looking at that. And I think it's more likely than unlikely that we will sell a few boats through 2025, of course, subject to that the pricing is correct. But we do think it makes sense to just divest a few noncore vessels or older vessels or even high-end vessels if the pricings are correct. So you could -- I could think that the fleet -- own fleet will be fewer towards the end of the year than we have today. So we are working on that as well. Then the final page is on the outlook. Just repeating $720 million to $800 million in EBITDA, hope to narrow that on the next crossroad when we present quarter 1. We expect, of course, gradually when we get this into our own model that EBITDA run rate will come up. We expect a much stronger second half, not only because we get into the model, but of course, also because we have a few long-term contracts starting in March, April onwards. So already now, of course, we know that, that will increase. We mentioned the tenders in Brazil. So very high activity tendering-wise in Brazil, very strong backlog from Tier 1 players, and also then a strong, let's say, opportunity list on not only time charters, but also on the subsea projects globally. So to sum it up, what is happening on the commercial side is that we're optimistic that we will continue to build backlog and we will have a book-to-bill that is quite good also in '24. Then of course, these pictures are -- they are not, let's say, randomly picked. The one on the left-hand side is one of the big anchor handlers owned in Brazil. And of course, because -- we're showing that because she is one of the hot candidates for being awarding a 4-year contract. The next one, red one is one of the ROV support boats that we have been bidding on RSV tender, and of course, she is there for a reason that we think she is in a good position for that. And then, we have the I-class, where we are installing now ROVs. And we see more and more opportunities to get good work from them through '25. And then, you have -- the next one is an anchor handler today trading in the North Sea [ spot ]. And that's -- one of our main jobs now is to reduce that spot exposure either through long-term contracts, and we have her for a reason that we think there is an opportunity for her also on that anchor handling tender at Petrobras. And then, we might sell a few and get the exposure down where we want to be. And the last one, of course, is the ROVs, where we installed them on quite a few boats and expect that to -- that will lead to higher earnings and better utilization for -- not only for the subsea assets we acquired, but also for some of the anchor handlers. So that, I think, was the last slide. So then, we go to the Q&A session, please.

All right. And as Mons said, please do feel free to send in your questions in the Q&A function on the webcast. We have quite a few already submitted. So let's kick off. Hot topic today has been the Subsea7 and Saipem merger. Do you have any initial thoughts on this merger and its impact on the industry dynamics and impact on DOF specifically?

Well, it's not -- firstly, I think it overall will be positive for DOF. There will be 1 less player in the industry. And so, it might be that open a bit of space for DOF on the [ sales ] side, on the construction side. So it might also be that such a large company will focus more on the really big projects and leaving a bit space for us on the smaller projects. So that's my initial reaction, that is delta positive for us. It could be -- open some doors with clients around the globe. And -- but then, of course, we -- there's nothing I can do with it. So we just have to see what happens.

You sound quite optimistic about the ongoing tenders in Brazil. Do you have any information about the timing and pricing dynamic here?

Yes. Of course, I have. But I don't think I should share anything on pricing before we hopefully have a final agreement. So -- but I think the -- of course, the auction results have been made public from some analysts. So you see the level being bid. And then, there is always -- Petrobras have a budget, which we don't know. But we expect, of course, the end result here to be quite decent and hopefully at least on the same level as you saw [ facing ] levels last year.

All right. Martin, could you provide some color on why the BRL-USD currency risk is not hedged regarding your USD loan facilities?

Yes, I can at least try. It's a difficult one to hedge because it is a result on the balance or the balance sheet and the P&L in the local company in Brazil. So there is no cash effect, and it would, in that sense, be a balance sheet hedge and a result hedge in Brazil in the local entity. And of course, we are working on finding, call it, ways to avoid having this P&L effect. And the only 2 reasons that we have is changing the functional currency and implementing what we would call hedge accounting on the local accounts. Then you would use the U.S. dollar contract as a hedging instrument on the local U.S. dollar debt to avoid taking the currency fluctuations over the P&L. But we are pursuing the viable options to do so. And I would say that changing the functional currency would be the preferred solution, but it is a bit of a process and a bit of a challenge with auditors and others in order to do so. So again, it's not an effect -- it's not a real expense. It is a P&L effect that is noncash.

Guys, I may add, not being an accountant, of course, for me, it's almost -- it's only noise. We have a dollar loan in Norskan. We have dollar income on the financial part in the contracts, and we have dollar accounts in DOF Group. So, that we have to take P&L -- it's for me, quite understandable. And the only reason for doing that is because Norskan has functional currency in reals. So it is almost what you can call stupid if you ask me, but I'm not an accountant.

All right. Thank you. Then, on the mentioned fleet optimization, could you elaborate a bit on your strategy here in the short to medium term? And when you potentially sell those vessels, do you expect those to compete in non-DOF markets? Or will you meet those same vessels as competitors going forward?

Of course, the thinking behind it is, of course, that we -- so where do we want to play? We want to play in the high-end subsea construction space, and we want to play in the, let's say, high-end anchor handling space, let's say, [indiscernible]. And then, of course, it's also then looking at the age of the fleet. So it is a quite, let's say, opportunistic approach to it. We will reduce -- so we will probably see if we can sell a few older boats that don't fit into those 2 categories, high-end anchor and high-end subsea. We will look at the fleet age. And of course, there are some, let's say, part of our PSV fleet that of course is not core for us anymore. So we look at those as well. But it also can be that when you have 65 boats and you get an offer -- if you get a very nice offer for a high-end boat, you sell that as well. So it's -- so we just have to see how we can maximize behind those -- optimizing the fleet and maximizing the cash return on the sale. So -- but initially, of course, it is to streamline and [ tailor-made ] the fleet to what is our core business. And of course, it might -- if we sell them all to the market -- not all to the market, of course, if we sell 2 anchor handlers below 200 tonne [indiscernible], if they stay in the market, it doesn't influence it at all. And if we sell a couple of PSVs, it doesn't influence at all. So we sell the boats to the guys who pay most. They don't -- they can compete as much as they want.

All right. And then there are quite a few questions on DOF Denmark and bridging the gap to the guidance in 2025 coming from now [ USD 7 million ] for the 2 months, November and December, and then reaching the guidance of $150 million to $200 million in 2025. So how do you plan to sort of bridge that gap that's needed to reach the guidance?

That's -- it's a very -- you need a very detailed [ hour ] to go through both -- for both to answer that. So it is -- and I think it was -- November, December, of course, it was quite a few one-offs. We also had to take some losses on the Implementer. So it is -- so I think it is not the answer you can do in half a minute. But of course, there is a budget both -- for both. There is a certain backlog already secured, and there is, let's say, a pipeline that we are bidding on. So of course, we are -- and of course, we also have -- there is a decent backlog on quite a few other boats. And there is new contract coming. So I think we are not particularly nervous that we will not be able to end up within that guidance. But I think it's impossible because it's built up boat by boat and contract by contract. And then, we will have to go through each and one of the 22 boats to get detailed answer. So you just have to trust on it that we have done our homework on it and that we -- let's say, if we are really good and clever and lucky, we can get to the higher end, and if we are not that lucky, somewhere in between.

All right. And as a follow-up on that, how do you see the phasing of DOF Denmark in 2025? Should we expect a significant step-up already in Q1? Or will that come more towards Q2 and H2?

I think Q1 will not be, let's say, a very normal step-up. I think it will of course be stronger than the average, $4.5 million. I guess, we have -- it was $9 million we had in quarter -- November and December. So it will be stronger monthly numbers than what we saw in November, December, but it will be gradually through the year. And I think it's -- I think when you get into April, May, you will see it really start to kick off. And of course it's -- but as we also said, of course, it's higher uncertainty on that fleet than we normally have. And so, it also -- of course, also that's why we are not narrowing the guidance now because we have to see what we are able to do. But if it goes according to plan, of course, through the summer and into the fall, you will see a much higher run rate than you, of course, saw in November, December and we will see in first quarter. So -- but we -- I guess we already have seen January, and I think January, of course, was according to our plan and stronger than what we saw the average for November and December.

All right. On the refinancing, do you expect that to be banks only or a combination of bank and bond debt?

That is still something that we consider. So we have -- yes, as we have stated previously, we are concluding the bank part, and then we'll decide on the path going forward.

All right. Then a question on the market. Excluding Brazil, it seems from oil service company comments that activity levels are leveling off or declining slightly in 2025. How do you see market trends outside of Brazil?

Of course, it's -- when I look at our activity in APAC, it looks healthy. It looks like we will get -- continue to build backlog and that the rates are quite healthy. So I think it will be a good year in APAC. And North America is more the same. That's the same picture where we see we are able to win work, but of course, also have a very high backlog from before. So the only -- I think we will see the trend from '24 continuing into '25. The only place, of course, where you see -- likewise, for Africa as well, there are quite a lot of opportunities. Let's say, APAC, Atlantic, North America, I know you mentioned Brazil, of course, all looks -- I think it will be a good year in all those markets in '25. The only place where you get a bit depressed is on the U.K. sector where you see low activity, low -- weak spot market. And of course, that is why we have to reduce that spot exposure and get the exposure to U.K. down. So I think what we see -- and of course, we are not macro analysts. We have people on the ground globally with all the oil companies almost every day. And because we collect our, let's say, intelligence on that and the number of bids we have -- the number of coming bids we have gives reason to expect that there will be good utilization and higher rates also in [ '25 ].

All right. And then on the guidance, do you account for any sale of vessels when providing that guidance? Or does the EBITDA guidance include all the vessels in the fleet?

Yes, that includes all the vessels. But of course, there are a few vessels with a lower budget. So if we sell those boats, of course, it will have a very limited impact on the EBITDA guidance. So, of course, it depends on what boats we end up selling.

And how do you anticipate that potential sale of vessels will affect dividend payouts? Will that increase the potential for future dividends?

That also of course -- in the short term, of course, it will increase it. But of course, it depends on what vessel you end up selling. But if we end up selling low-end boats, it can give a small increase short term and have no impact longer term.

All right. And then, on the I-class, do you expect to secure some long-term work on some of those vessels to de-risk the utilization and market fluctuations there?

Of course, we -- I guess the overall plan, of course, is that we would like to have, let's say, 1 or 2 of them on what you call longer-duration contracts, perhaps 1, 2 multi-year contracts. So, that is, of course, the overall plan. And -- but of course, also then building -- you have to remember that we only start building backlog on those 1st November. So it's -- and of course, the lead time for the projects they typically do are a bit longer than a couple of months. So if everything goes according to our plans, we will probably place 1 or 2 of them longer term and then run the rest in the project market. And of course, that also depends on -- of course, we work on projects for those boats in '26 and also a few in '27. So the answer is -- long term or short term, the answer is that we will de-risk the exposure we have with [ 4 of those ] boats running shorter term. And perhaps adding -- we do think, of course, that the timing is very good. It's a good market, and we, of course, expect that '26, '27 for high-end really big subsea boats will be the strongest year we have seen in this cycle. So to have that -- let's say, those vessels available for capturing work in '26 and '27 might end up being very good for us.

You mentioned [ seeking ] authority for a share buyback program. Do you have any more information to share about that on the potential size of such a program or other details?

No. So we will -- so the -- of course, the Board will work on that and propose something for the general meeting, which we are going to have in May, and then -- so there will be more details later on that.

Okay. Can you please explain the jump in corporate revenues and OpEx? And how do you believe that this will develop going forward?

Yes, I can give a bit of flavor on that. And of course, the corporate cost is covered by, call it, the regions and the operations of the group, and it's a question of how much cost is taken through corporate and not directly. So it is -- you can sort of decide the share size of it. What is a bit special for 2024 is there is a relatively large cost associated with the transaction of DOF Denmark that is taken by corporate. And of course, that is a one-off, and we -- there is no reason that this should not, call it, go back to normal. But it has of course a bit of effect with the size of the group and the magnitude of operations, but the jump is primarily associated with DOF Denmark.

Perhaps also adding was that we are -- when we know 2 companies became one, we are looking at the overall overhead level, SG&A level on -- not only on the corporate level, but also on, let's say, the marine operations level. Of course, we are focusing a lot on that and then try, of course, to optimize the cost side on our operations as well.

And then, on CapEx and CapEx guidance, could you say anything about the direction of maintenance CapEx and subsea growth CapEx in 2026 and 2027?

It's, of course, early days. And of course, if you look at the growth CapEx, this year, of course, it's mainly then related to subsea equipment on the DOF Denmark fleet, but it also -- a decent portion of it is actually growth CapEx in relation to the 3-year [ 3 plus 3 ] IRM contract we won with Equinor. So it's -- let's say, perhaps 1/3 of it might be related to that IRM contract. And it was -- of course, how we develop forward, of course, depends on what work you're going to execute, what contract you're in and what you do with the fleet. But on -- yes, and also, of course, we expect that portion to be below in '26 and '27. And on the maintenance CapEx, I guess it depends on the docking cycles on the boats. And so, I guess, on average, Martin, perhaps around that level is where they're going to stay on average, but a bit fluctuation year-on-year.

All right. And then, if we look at contract coverage, specifically in Brazil, you have quite a few contracts coming off now towards the end of 2025. And you mentioned that many of them you hope to place on the ongoing tenders. Should we expect some downtime between these contracts? Or will they be relatively back to back?

Of course, it depends. If you are in Brazil, of course, you normally have -- probably have a month downtime. You have to do the acceptance test and you have to do some small upgrades on the boats. And so, let's say, you have to assume perhaps a month downtime between an old Petrobras contract and a new Petrobras contract.

All right. And then, this will be the final question that we have time to address at this point, and that is, how is the inflation pressure in the industry? And do you have good cost escalation in place in your long-term contracts?

Of course, in typically a long-term contract, it is -- the crew cost is normally -- there's a clause saying that you escalate the contract [ yearly ] based on actually the negotiated tariffs between the unions and Shipowners' Association, and that based in Norway, that based in Brazil. So the answer to that side of it is, it's okay. And then, on the -- let's say, the OpEx side, of course, you have normally consumer price index. So it's -- in general terms, it's a decent protection. So normally, we are able to, let's say, keep the EBITDA level flat on a long-term contract.

Perfect. Thank you. And that was the last question for now. So thanks, everyone, for coming with the questions and for listening in.

Thank you very much to all of you, and have a nice evening.